On Wednesday, the market regulator requested 5 senior IndusInd Bank officials. It include former deputy CEO Arun Khurana and previous CEO Sumant Kathpalia, to disgorge around Rs 20 crore for alleged insider trading. Khurana has to disgorge ₹14.4 crore, Kathpalia ₹5.21 crore, and other amounts range from ₹4 lakh to ₹7 lakh. Here’s how the SEBI arrived at those figures.
IndusInd Bank on March 10 disclosed losses in its by-product portfolio. It estimate a destructive impact of 2.35 % of its net worth of around ₹1,530 crore. The bank’s stock fell 27.2 %the day after today, from ₹901 to ₹656.
SEBI investigation
Following the disclosure and inventory crash, Sebi initiated a suo motu research to perceive trades. The regulator tested records from NSE, BSE, depositories, KPMG, and IndusInd Bank. It focus on the period from September 12, 2023 to March 10, 2025.
Why September 2023? Sebi’s probe discovered that following the Reserve Bank of India’s Master Direction (Classification, Valuation and Operation of Investment Portfolio of Commercial Banks) on September 12, 2023, IndusInd shaped an inter-departmental crew by September 26 to address spinoff accounting problems. At the team’s first meeting on September 26, discrepancies in the accounting of by-product contracts were recognized, prompting the bank to calculate unreported losses.
Who traded before the crash?
SEBI recognized those who was aware of the derivative loss discussions and traded IndusInd shares throughout the U.S. Duration. On December 4, 2023, Khurana offered 348,500 stocks to net ₹53 crore. Kathpalia bought 125,000 shares, incomes ₹19.2 crore. The 3 other individuals bought smaller portions around the same time. Sebi referred to that none of these people had submitted a trading plan for FY24 or FY25, which might have indicated pre-deliberate income unrelated to UPSI.
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